Elanco School District photo

The Eastern Lancaster County School District offices are inside Garden Spot High School, 669 E. Main St., New Holland.

The Eastern Lancaster County school district's new final budget is in, and it includes a tax increase of 2.1 percent for property owners.

Monday night the Elanco school board voted to approve the final budget for the 2014-2015 school year.

The increase helps to close a deficit that has been whittled down throughout the year: The board started with a deficit of just over a million dollars, which was eventually pared down to approximately $620,000 in May.

In closing the deficit, administrators cited salary and benefit cost reductions related to changes in staffing, as well as larger-than-projected real estate tax revenues.

The final 2.1 percent tax increase also complies with the state index or cap on school district tax hikes, which is also 2.1 percent.

However, Elanco was not bound to the index, because of exemptions that allowed the board to consider a bigger tax increase of 3.65 percent in initial budget talks.

In prior comments, administrators did not commit to raising taxes, saying there were still opportunities for additional savings or other remedies to close the gap.

In May, school board president Glen Yoder, who was not present at Monday’s meeting, expressed his desire to have a final budget that complied with the state index.

The increase will bring the district's millage rate up to 14.4141 from 14.1177, which would represent a tax of $1,441.41 for the owner of a property valued at $100,000.

In comments after the board meeting, Elanco's chief of finance and operations Keith Ramsey said the district was able to save on benefit costs, which helped to close the deficit and limit the final tax increase.

As its members passed the final budget, the board also announced a successful resolution of contract negotiations with the Eastern Lancaster Education Association, representing district educators.

The contract extends retroactively from the 2012-2013 school year to the 2015-2016 school year.

Under the new contract, salary increases will range from 1.9 percent to 3.4 percent, averaging 2.8 percent. A prior basic preferred provider organization health care plan will be replaced by a high-deductible plan, with the district and teachers sharing deductible costs.

The new plan also includes a wellness program component.

Elanco school board vice president Rodney Jones read a prepared statement on behalf of the board.

He said the new contract "cuts down on health care costs while maintaining a quality product for the staff.

"The district is pleased that it was able to avoid a prolonged labor dispute and attain significant savings in health care costs." Jones said. "The agreement is fair to the needs of the taxpayers and the teachers while meeting the educational programming needs of students in the district."